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Thursday, 9 December 1971
Page: 4632

Mr Calwell asked the Treasurer, upon notice:

(1)   Is- it a fact that the Mutual Life and Citizens Fire and General insurance Company Pty Ltd (a) is not a mutually owned and controlled company and (b) . pays its shareholders a 10 per cent dividend each year out of its profits.

(2)   Will he furnish (a) the name of, (b) the assets value of, (c) the profit made by, (d) the amount paid in dividends by and (e) the number of shareholders in each of the private companies which deal in life assurance business for the latest year for which figures are available.

(3)   Will the Government take action to increase substantially the deposit of all companies, which deal in life, accident, marine, fire, motor car or any other form of insurance and in which foreign interests have shares or are otherwise financially involved.

(4)   Will the Government take appropriate steps for a referendum to be held to increase the powers of the Commonwealth Parliament so that valid laws can be' enacted to protect the victims of bushfires, floods, droughts and other natural disasters that are exercisable under the defence power in time of war and are described in legal terminology as being due to acts of God.

Mr Snedden - The answer to the right honourable member's question is as follows:

(1)   (a) The MLC Fire and General Insurance

Company Pty Limited is a proprietary company and is a wholly-owned subsidiary of the Mutual Life and Citizens' Assurance Company Limited. The latter company, whose main business is life insurance, is in turn a subsidiary of The MLC Limited, which is a public, and not a mutual, company, (b) It would appear that the last dividend provided for' by The MLC Fire and General Insurance Company Pty Limited was in the year ended 30th June 1968 and that this dividend was at a rate of 6 per cent on paid-up capital.

Allocations of profit for the year ended 31st December 1970 from the life insurance and other operations of The Mutual Life and Citizens' Assurance Company Limited were $3.9,020,455 to policyowners and $1,310,000 to shareholders. The allocation to shareholders represented a dividend of 65.5 per cent on paid-up capital. The MLC Limited has declared total dividends of $1,301,438, which represented 18 per cent on paid-up capital, for the year ended 30th April 1971.

(2)   The Insurance Commissioner has advised that none of the companies registered under the Life Insurance Act 1945-1965 is a. private company as defined in section 103a of the Income Tax Assessment Act 1936-1970, or a proprietary company as defined in section 15 of the Australian Capital Territory Companies Ordinance 1962-1969. The number of shareholders in each registered life insurance company is not known but extensive information in regard to the other aspects' referred to in the question is contained in the -annual reports of the Insurance Commissioner, the last of which, for the year ended 31st December 1970. was tabled in the House on 6lh May 1971.

(3)   The Life Insurance Act 1945-1965 provides for close supervision of companies carrying on the business of life insurance and a substantial increase in the deposits to. be lodged by such companies in accordance with the Act is not seen as. necessary to protect the interests of policy owners. . In respect of companies carrying on general (non-life) insurance, ..the Government intends to introduce legislation for the supervision of their activities. The question of whether any change should be made in the deposit requirements applicable to such companies under the present Insurance Act 1932-1966 is under consideration in conjunction with the proposed legislation.

(4)   The provision of assistance to those adversely affected by natural disasters such as bushfires, floods and droughts is primarily the responsibility of State Governments which are in the best position to assess the need for, and provide, such assistance. However, in the case of major disasters requiring expenditure judged to be beyond the means of a State, the Commonwealth has always been prepared to assist the State concerned in financing relief and restoration measures. In addition, the Commonwealth has always been prepared tq assist, on humanitarian ground, in financing ' expenditure on emergency relief of personal hardship and distress even where relatively small .amounts have been involved. Commonwealth assistance to the States for this purpose, which amounted to more than $127m in the 6" years ending 30th June 1971, does not normally extend to the ' cost - of restoring private assets damaged by natural disasters, it being regarded as the responsibility of the individual to provide against such losses by way of insurance. These arrangements have worked, and are working, effectively and the Government sees no need to propose a referendum concerning them.

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